A frequent flyer program is a valuable marketing tool. You sign up and the airline can track your activity, know how valuable a customer you are, and market to you – not just the products and services you’re buying today, but cross-selling you on other kinds of transactions you aren’t already making.
The main way airlines make money from their programs is selling miles to banks, who rent the airline’s brand and customer lists, and reward their credit card customers to encourage them to transact. In almost every business marketing is an expense line. For an airline it’s a profit center.
During the pandemic American Airlines managed to raise $10 billion in debt backed by its AAdvantage program. Other airlines raised similar amounts, almost as much.
But they need customers to sign up in order to market to them, sell them on both flights and partner activities, and American in particular has a challenge in that they haven’t built in the ability for customers to join the program while buying tickets. It’s bizarre.
However, with the program now reporting up to the Chief Revenue Officer they are better at valuing the loyalty program. They’re better at understanding how important the revenue contribution is even to their flying. They used to see New York as a losing market, now they understand how New York flying matters to be relevant for New York credit card spend.
And so they’re incenvitizing people to join the program, which is something you used to see a lot more of. They aren’t just giving away free miles (too costly and too easy to game). Instead they’re bonusing customers for joining and tranascting. Because the two things that make you a valuable customers are,
Frequent Miler reports that joining the program triggers an offer under your ‘promotions’ tab (make sure you see it there in order to know you’re eligible) to earn 5000 bonus miles.
- Register within 30 days of joining, before booking flights. Then you have 3 months to complete activity for the bonus.
- Purchase and fly 2 flights = 2,000 miles
- Earn miles with 2 eligible partners = 2000 miles. These are AAdvantage eShopping; SimplyMiles; AAdvantage Dining, Avis Budget car rentals; Rocketmiles
- Earn 2000 miles for each of these and earn another 1000 miles